LAS VEGAS–Improvement of insurers' outmoded legacy computer systems will be helped by the arrival of the new Web-enabled processing strategy SOA, a technology expert advised here yesterday.

That assessment of service-oriented architecture's impact was provided by John Kellington during a session titled “Technology Evolution and Revolution: IT in Changing Times–A CIO Panel,” at the 2006 ACORD LOMA Systems Forum.

In addition to SOA, which allows re-use and sharing of different services and processes across platforms and information silos, the discussion touched on a variety of topics including outsourcing and other challenges to chief information officers.

Mr. Kellington, senior vice president and chief technology officer for Ohio Casualty Group, based in Fairfield, Ohio, said legacy transformation will be aided by the recent advent at insurance companies of SOA because, “if you have the appropriate architecture, a lot of things get a lot easier,” said Mr. Kellington.

But, it is “important to get our arms around what we mean by SOA,” he continued.

Panelist Barbara Koster, chief information officer for Newark, N.J.-based Prudential Financial, said: “Architecture enables business processes. This is the first time we can articulate well to our business partners what it is we do.”

William N. Pieroni, global chief information officer for Chicago-based Aon Corporation, pointed out the “ambiguity” around terms such as SOA and Web services.

“This is ultimately formalized common sense,” he said of SOA. “Let's just embrace it.” He added, however, that he did not favor a common definition of SOA, noting that such a definition would be “ultimately meaningless.”

The panel also discussed how insurers can better manage their data. “The world now is micro-rating and predictive modeling,” said Mr. Kellington. “Getting there comes down to data. It takes a lot of communication; a common data dictionary helps.”

According to Ms. Koster, the ability to “make low-level data into information that the business can use to create products is critical.”

Panelist Ann Purr, second vice president, information systems, for Atlanta-based LOMA, noted, however, that businesses may have difficulty deciding where to spend IT money. “The IT community becomes an advisor,” she said.

The discussion next addressed insurance companies' business and IT alignment and the “chasm” generally acknowledged to exist between the two entities. “Two-thirds of IT projects in insurance fail to deliver on their objectives, perhaps due to unrealistic expectations,” said Mr. Pieroni.

Mr. Pieroni noted a historic view of IT as “a glass house, separate, put away,” while business people who hand them projects are “hoping and praying for results.” Business personnel in insurance, he remarked, have learned more about information processing, but remain “a bit sophomoric.” He did allow, however, that the industry is “on the path to self-discovery.”

Mr. Kellington said the chasm label does not apply to his organization, because “most CIOs are members of the executive management team,” and “we all talk. It's something you work on.”

Mr. Pieroni warned that there is a sizable population of IT professionals in the industry who have been around for up to 30 years who are nearing retirement age, and “the generation of workers behind this generation is not as large–and not ready to go into technology.”

Mr. Pieroni pointed to the idea that college-bound youth today are being told (incorrectly) that “everything is going offshore”–thus, they are not opting for careers in computer science.

Mr. Kellington noted that young job seekers in IT are looking for competitive pay and the opportunity “to work on cool projects.” Insurers don't promote a nurturing enough environment for them, he said.

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